AIB's new boss faces a grilling today over how his bank loaned over £700m (€774m) to a Greek tycoon who is charged in London with fraud, forgery and money laundering.

Colm Doherty faces questions over what checks were made on poker-playing Achilleas Kallakis, who called himself 'the Don', before the bank approved the loans for a string of plush London properties he bought.

The portfolio included buildings which housed the 'Daily Telegraph', parts of the Metropolitan Police, the UK Home Office's asylum processing centre and Orion House, the tallest building in London's Covent Garden.

Mr Doherty will make his first public appearance as AIB managing director this morning when he will have to unveil about €5.3bn of bad loan losses for 2009 and the bank's first ever annual loss.

AIB's UK corporate banking arm, which extended the loans, ended up booking a £56m loss on the loans in its 2008 accounts.

That loss was recorded after the bank seized the properties and sold them on to Dublin-based Green Properties.

Mr Doherty was ultimately in charge of the corporate banking business that extended the loans between 2003 and 2007, as then-head of AIB's capital markets division.

Mr Kallakis and Alexander Williams were each charged yesterday at the City of London Magistrates' Court with two counts of conspiracy to defraud, 13 counts of forgery, five counts of fraud by false representation, two counts of money laundering and one count of obtaining a money transfer by deception.

It stands as one of the largest such property cases ever investigated by Britain's Serious Fraud Office (SFO).

During 2008, AIB became aware of problems with an element of its security interests in the so-called Kallakis portfolio. However, news of the alleged scam only broke the following March, when it emerged that the SFO had launched an investigation into it.

The probe centred around claims that money had been borrowed, based on fraudulent documents showing leases to tenants in the properties had higher rents and were signed for longer periods than actually was the case.

Mr Kallakis, formerly known as Stefanos Kollakis, and Mr Williams, formerly known as Martin Lewis, were remanded on conditional bail as the case was sent to a Crown Court for the next hearing on May 4.

The sale of the properties to Green Property, headed by Stephen Vernon and Pat Gunne, has attracted attention. It allowed the bank avoid a 'fire sale' of the assets and make a relatively small £56m write-down, even as UK commercial property prices tumbled.

However, it is understood that Mr Kallakis' equity in the portfolio, in the region of about £140m, had already been wiped out before the loan was hit.

A spokesperson for AIB declined to comment yesterday as the case is the subject of court proceedings. The SFO also declined to comment any further.

The two defendants were also charged in the London court yesterday with offences in relation to a shipping loan from Bank of Scotland in 2008, which resulted in losses of around £5m.

Analysts estimate the €5.3bn of bad loan losses that AIB is set to reveal today will send AIB into a €2.5bn net loss -- equivalent to almost €7m a day.

It will mark the group's first earnings shortfall since it was created in 1966 through the merger of three banks -- Provincial Bank of Ireland, Royal Bank of Ireland and Munster & Leinster Bank.